Health Service Executive (Financial Matters) Bill 2013: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

I welcome the Health Service Executive (Financial Matters) Bill 2013 which rolls back on delegation to the HSE of issues which should come within the remit of the Minister for Health and the Department of Health, disestablishes the Health Service Executive Vote and provides that HSE funding will from 1 January 2015 come from the Vote of the Department of Health and establishes a statutory financial governance framework for the HSE.

The HSE Vote will be abolished and a new and robust financial governance structure will be introduced. This follows on from the enactment of the Health Service Executive (Governance) Act 2013 under which the HSE board was abolished and replaced by the directorate. Under the existing system, which developed following establishment of the HSE, the Minister can abdicate almost all responsibility for the operation of the health service provision. This is being changed. I welcome that.

Before speaking further on the Bill I want to raise an issue of concern in relation to funding of mental health services. I will try to be as brief as possible. In 2012, the Government allocated an additional €35 million for development of the mental health services, including recruitment of 414 whole-time equivalent professionals to develop the community mental health service. Recruitment did not commence until October of that year. By the end of the year, no staff had been recruited. However, €2 million was allocated to the National Office for Suicide Prevention, which brought its budget to approximately €4 million. This means €33 million of the €35 million, or 94%, was not spent on that for which it had been allocated. I am informed it was spent in the mental health area. On what was it spent? When I asked that question during a meeting of the Joint Oireachtas Committee on Health and Children one of the officials accompanying Mr. O'Brien, told me that it went towards the budget deficit.

In 2013, 447 staff were to be recruited but only 137 were recruited. Had the 414 staff from the previous year been recruited they would have had to be paid in 2013. This means the €35 million had to be allocated on a continuous basis otherwise staff would have had to be let go. In all, 513 staff were recruited. Assuming that 50% were recruited in the first half of that year and the other 50% were recruited in the second half of the year, this means only 30% of the €70 million was allocated that year, plus an additional €4 million to the National Office for Suicide Prevention, again almost doubling its allocation. This means €45 million of the €70 was spent elsewhere. Where did it go? In two years, €78 million was not spent on that for which it was allocated. Where was it spent? I am informed it was spent in the mental health services area but was it used to meet a deficit of moneys moved out of the mental health services? Perhaps the Minister of State would throw some light on that issue when replying to the Second Stage debate.

The Health Service Executive (Financial Matters) Bill 2013 provides for the disestablishment of the Vote of the HSE and the funding of the HSE from 1 January 2015 from the Vote of the Office of the Minister for Health. It establishes a new financial governance structure for the HSE, which is necessary as the existing statutory system of control, which exists by virtue of the HSE having its own Vote, will no longer apply. The Bill gives the Minister the power to set a net budget for the HSE and to approve, as part of the service plan, that if the HSE exceeds its budget in one year, it must discharge its liabilities arising as a first charge the following year. The Bill also imposes certain legal obligations on the Director-General of the HSE to ensure that the executive operates within the financial limits imposed by the Minister and provides for a new procedure for the approval of capital plans.

The purpose of the 2004 Bill was to give the HSE greater operational autonomy from what was seen as a politicised decision-making system but it crucially weakened the accountability of the HSE to the Minister for Health and his Department.

Experience has shown how flawed it was to remove the accountability of this House and the Minister for what was happening with the finances allocated to the Department of Health. The Bill seeks to rectify this situation by restoring the Vote of the HSE to the Office of the Minister for Health and thus re-establish appropriate and proper accountability for the HSE to the Government.

This is another step on the reform journey along with the dissolution of the HSE, the establishment of a health commissioning agency, new community care structures and the establishment of hospital trusts. It is appropriate that the Minister has been progressing reform since the publication of the Future Health document a little over one year ago. The Minister published reports on establishing hospital groups and on the future of smaller hospitals. Since that publication the Minister and the Government have appointed chairpersons for each of the seven groups and they are currently in the process of appointing senior executive officers.

In March 2013 the Minister published Healthy Ireland, the Government strategy document for empowering people to get healthier. The Government also published Tobacco Free Ireland, the strategy for making Ireland tobacco-free by 2025. Furthermore, the Government has published a package of measures to tackle alcohol misuse in the form of the Public Health (Alcohol) Bill. The Joint Committee on Health and Children is finalising the report on obesity in children, which will be a relevant contribution and I hope the Joint Committee on Health and Children will publish that document in the near future. I pay tribute to Deputy Fitzpatrick, who did a good deal of work and research for the committee. He put in considerable effort to produce a worthwhile report on child obesity, which is a growing problem in Ireland, as has been highlighted in recent years. I am pleased to support the Bill.

I wish to share time with Deputy Joe Higgins. The reforms are intended to abolish the HSE budget and subsume it into the Department of Health budget. There will be a new financial governance model and a rule whereby if there is over-spending it will have to be rowed back in the next year. There are also new responsibilities for the director of the HSE. We know what the Bill is about but the question I am asking is whether this will solve the problem. Will this reconfigure it? How do we get the best value from the large amount of money that we spend on health services?

I do not dispute the value in there being one budget. In fact, it is useful to have some debate around the budget and it will be directly under the responsibility of the Parliament. However, I question whether it will achieve much in reality and I say as much for several reasons. Since the time the Health Service Executive was established I have been critical of the institutional arrangements and I believe these institutional arrangements are at the heart of the problem. Where there have been reforms I believe they have been rather superficial. The old health boards, more or less, still exist, the HSE is on top of them, there is a governance arrangement on top of it, in turn, and then there is the Minister. One need only look at the HSE website to see that there is chaos in the institutional arrangements. A look at any website tells us something about what is behind it. It is impossible to find telephone numbers on the site and generally it is very fragmented. It is guaranteed that when we see that pattern we will see duplication and confusion. It screams out to me that the institutional arrangements require significant amendment.

Within the HSE there are many good and dedicated people who are working hard and who feel rather put upon because of the constant criticism of the HSE, something these people all take to heart. They did not design the institutional arrangements. I do not believe it is only a matter of the financial arrangements. Addressing the financial arrangements will not solve the problem. It is a rather reactive approach. Having said that, I prefer to have oversight and those of us in the Dáil can have more direct oversight in respect of the shifting of those financial arrangements.

Clearly we need to get good value from the amount of money we expend on health care. Some of the points included in the service plan really jumped out at me. One particular example in the conclusions on page 7 states:

It will be very challenging in 2014 to fully meet all of the growing demands being placed on the health services. In particular, some service priorities and demographic pressures may not be met.

I always look for the reference to demographic pressures. Like the area the Minister represents, in my area the demographics have shifted remarkably. There has been a disproportionately young and growing population in recent decades. These are the areas that lose out because there is an opportunity cost. I wish to draw attention to one particular area to highlights this, that is, therapy posts for which the embargo was lifted. Approximately 220 new therapy staff were to be recruited. We looked at where they were to be spread throughout the country and above all two areas jumped out. One was Cork and the other was the area taking in Kildare, west Dublin and west Wicklow. In the latter area some 58 of the 220 posts were to be located. That really shone a light on the huge gap in services there. There was a guarantee that one year afterwards, all the people would be recruited but, according to the most recent information I have, they are still not all recruited. I asked about it early last year.

Let us suppose €20 million has been included in a budget for that recruitment but we do not recruit people until the tail end of the year. Then, the allocation is not being used for that purpose and the money will be reallocated elsewhere. Shifting the financial responsibility from the HSE to the Minister will not alter that. It may well give the Minister more scope to slow down the recruitment. Deputy Neville made a point about money allocated to mental health services that was not spent in the year for which it was allocated.

The Charter of Fundamental Rights is something we discussed as part of the Lisbon treaty referendum.

It states that everyone has the right of access to preventative health care and the right to benefit from medical treatment under the conditions established by national law and practices. It also states that a high level of human health protection shall be ensured in the definition and implementation of all union policies and activities.

When it comes to the enforcement of such rights, however, they almost have to be guaranteed by the courts. For example, Ireland would be fined by the EU if rivers were polluted and treatment plants were substandard. However, we do not seem to have guaranteed rights for minimum levels of health care. The HSE's governance arrangements will never produce an optimum result until they are fundamentally changed. Changing financial and budgetary arrangements will not alter a system that is fundamentally flawed and reactive.

It is a bit like a youngsters' football match. When their team is losing, the youngsters will run in, pull out the goalkeeper and blame that player for any goals that might result. Effectively, however, more than that is wrong in the health service. It is not just the financial measures that are wrong, the whole structure of the HSE is wrong. I do not see any vision to change that or any guarantee of a health system that will deliver what we signed up to as a country when people voted to include that element as part of the Charter of Fundamental Rights.

Health service delivery depends very much on what area of the country a person is living in. Three year olds may require speech and language therapy but if they are delayed for two years they will start school at a disadvantage and will continue to have that disadvantage right through primary school. Delaying expenditure on such services because of the way the budget must be structured in a given year does not save money in the longer term. There is a huge cost to individuals who are denied such services.

I would like to see a vision for the health services. We are told that a White Paper is on the way, which is really a Green Paper on how health services will be paid for. I do not see the broad vision or what might be described as an "NHS moment" for the Irish health care system. It is very much a piecemeal approach. I do not have an objection to having oversight on the budget but it will not make a fundamental difference unless the Minister deals with the institutional arrangements in a much more fundamental way.

Providing adequate resources for a health service that would comprehensively cater for the entire population of this State should be a key priority for any government. Successive governments have failed dismally to do this, however.

During the economic crisis in Irish capitalism in the course of the 1980s, savage cuts were inflicted on our health services. Thousands of beds were cut from public hospitals despite the fact that even at that stage health spending here lagged far behind comparable countries in Europe. We now have a second major assault on our health services in the wake of the collapse of the property bubble and following the disastrous decision to bail out bankers and bondholders on the backs of working class people. This austerity is taking billions from the pockets of ordinary people, creating huge unemployment problems and dramatically affecting the central taxation income. In response to its disastrous policy the Government piles disaster upon disaster, with a major attack on our health services.

The Government currently boasts of having taken tens of thousands of jobs out of public services, including many thousands from the health service itself. The effects of that are being shown up quite brutally around the country with the huge stress and strain on front-line workers in our health services. Fine Gael's policy on future health funding and organisation, based on what is called universal health insurance, has dictated Government policy in this regard. Five years ago, I analysed that Fine Gael policy called FairCare, and my analysis stands the test of time. According to Fine Gael, FairCare would represent the most fundamental reform of the health system since the foundation of the State. The new policy, however, involves a huge surge in the privatisation and marketing of health care. It essentially hands the running of health services over to private insurance companies.

The Fine Gael document, FairCare, states that Ireland has two administrative systems for health: one public, the HSE; and one private, the insurance companies. Over time, it states, these two systems will become one run by the insurance companies. That gives the game away. The document is replete with the ideology and terminology of market capitalism. For example, it states that health providers will be paid for how many patients they treat. In addition, it states that patients will be a source of income rather than a cost, just as they are in private hospitals today.

The document further states that a Fine Gael government would encourage insurance companies from other European countries that have experience of implementing social insurance models to enter the Irish market. Therefore, our health service is to become a market for competing private insurance companies. While claiming that this Fine Gael policy will be based on a not-for-profit ethos, in reality it will involve cut-throat competition for profit in the health system. Profit-based private insurance companies will control the entire hospital budget. Therefore, public hospitals will be turned into autonomous units to compete with other hospitals, including private ones, for so-called business from these companies.

Just like the banks and developers that crashed this economy after a greed-fest that lasted years, private insurance companies are driven to maximise profits for their shareholders. Fine Gael's policy, which is now accepted by the Government, would give such companies inordinate power over patient care. It is clear, therefore, that in order to squeeze more profit out of the system they would, to cut costs, put relentless pressure on hospitals and others who provide health care.

As a result, hospitals, doctors, nurses, administrative staff etc. would be forced into a vicious competition driven by the commercial imperatives of the insurance companies. This would inevitably distort what should be the basic criteria relating to proper health care, namely, protecting the health and well-being of the patient and having compassion for those who are ill. That is the reality.

Fine Gael has stated that it relied heavily on the Dutch model when developing its own model. Since Fine Gael's FairCare policy document was introduced, the Dutch model has been shown to be extremely prone to both crisis and ongoing difficulties. The IMPACT trade union, which organises thousands of workers in the public health service, compiled a study, the author of which stated that in the Netherlands "a system of competing private insurers has created an inequitable and inefficient system of funding, different tiers of entitlement, rising hospital deficits, and even bankrupt hospitals" and that "financial incentives to discharge patients early has also led to one of the highest hospital readmission rates in Europe because more people experience post-discharge complications". Patients experienced such complications because they were turfed out of hospital early in order that the insurance companies might save money and make further profits.

It is an incredible betrayal on the part of the Labour Party that it has swallowed - lock, stock and barrel - the Fine Gael privatisation programme relating to the health service. That programme will not only exacerbate the problems I have outlined, it will also provide for a massive new austerity tax on those people who pay their central taxes - PAYE, VAT etc. - and look to the public health service when they require care. Those individuals will be obliged to pay an additional tax which some commentators estimate will run to €1,600 per annum if the Fine Gael policy is put into effect. Again, this involves taking the route of taxing working people further rather than making the choice - which could already have been made during this period of austerity - to, for example, tax major corporations. Such corporations pay tax at a rate that is among the lowest in Europe. If we take a rate of corporation tax of 8% as opposed to the headline rate of 12.5%, then based on the figures for 2010 every extra percentage point would have amounted to an additional €525 million for the Exchequer. In addition, a tax could have been imposed in respect of the huge increase in wealth that has been recorded among the extremely well off in our society in the past five years. The resulting income from such taxes could have been invested in job creation and would have increased the State's tax take even further. It could also have been invested in the health service and used to provide universal health care. Such health care would have been paid for from general taxation and would have been of a very high standard. If what I have suggested had been done, control of the health service would have been taken away from private insurance companies and the other parties that currently control it and placed in the hands of the front-line health workers who keep our hospitals and the service itself going.

On the basis of a democratic transformation of our health service such as that to which I refer and the provision of proper funding, we could deliver a service that would be supreme in terms of the level of care provided, desired outcomes for patients and the elimination of stress and worry for people as a result of the disappearance of waiting lists. In addition, many of the difficulties being experienced at present would be removed as a result of health workers and care workers in general being placed at the very centre of the administration of the system.

Deputy Feighan is sharing time with Deputy Harris.

I welcome the opportunity to contribute to the debate on the Health Service Executive (Financial Matters) Bill. Under the Health Act 2004 the Health Service Executive has its own Vote and is funded directly by the Exchequer separately from the Department of Health. Effectively, this Bill will lead to the disestablishment of the HSE Vote and put in place a new statutory framework to govern the executive's expenditure.

On occasion I have congratulated the leader of Fianna Fáil, Deputy Martin, for certain actions he took but I also hold him responsible for establishment of the HSE. One innovative item of legislation he introduced, as Minister, was that which introduced the smoking ban. That legislation was introduced in the face of lobbying by publicans and others. Deputy Martin showed courage in introducing that innovative legislation which has certainly led to lives being saved. His timing was perfect because the smoking ban was introduced at the beginning of summer and smokers did not mind going outside to smoke in the good weather. I have always been of the view that if it had been introduced in November or December, there would have been much more opposition because smokers would have objected to being obliged to go outside in the freezing cold. Needless to say, the relevant legislation was necessary, innovative and welcome and it helped to save lives.

When he was Minister, Deputy Martin made a huge mistake by facilitating the establishment of the HSE because this effectively led to power being taken out of the hands of elected representatives and placed in those of people who were answerable to no one. The question that was asked in this regard was "How much is enough?" and the answer always was "A little more". In recent years the current Minister has introduced very innovative legislation designed to try to clean up the mess that was created. When he was Minister, Deputy Martin oversaw a process whereby 147 different reports were compiled in respect of the health service. If issues arose in respect of the health service during its time in office, the previous Administration invariably commissioned very expensive reports, which took time to compile and many of which were cumbersome, in respect of them. Those reports were then placed on the shelf and those then in government stated that they would have eventually done something about them. The reports in question were left to gather dust and nothing was ever going to be done about them. That was the way the previous Government operated. It did some good things but, unfortunately, it also did many bad things. When good news emerged, it wanted to claim the credit. When there was bad news, however, it hid behind the HSE.

In the past if one wanted to get someone a bed in a hospital, one was advised not to approach a politician or go through the system. One's local doctor or a consultant in the area would probably have known somebody who could get one a bed. Effectively, those people were answerable to no one. Consultants in hospitals were able to give people beds. I know of people who handed over a few punts or euro, depending on when the incident occurred, and their mothers or whomever were kept in hospital for an extra five or seven days. That would not happen in any other country's health system. It was both wrong and corrupt. Neither the HSE nor the then Government did anything about it. I accept that not everything in the garden is rosy but at least action is now being taken.

Deputy Higgins was correct in what he said with regard to health insurance. My mother went into Sligo Hospital for a routine operation and was kept there for five days. The only reason for this was that she has private health insurance. If she had been a public patient, she would have been discharged much more quickly. She should have been taken in, treated and discharged within a day in any event. I raised this matter with the Minister. I am convinced that the hospital was following the money. My mother has private health insurance and the hospital was convinced that her insurer would just pay for her stay without question.

That is not the way to run a business.

I am pleased that at last the insurance industry is asking for proof - such as a photograph - that a bed was occupied. This may be regarded as intrusive by some but it is a way of following the money. The health insurance premium for my mother and myself has increased but thankfully I think we can afford it. I have an insurance policy but I would not want to be moved ahead of someone on a public waiting list because it is not fair. The Minister has a significant challenge to address the very complicated issues of risk equalisation.

I refer to the situation in the west. Roscommon hospital is a small hospital which needed to recruit consultants, doctors and nurses to work in that single entity. However, when the throughput of patients is not high, no doctor who wants accreditation or to move up the professional line will be attracted to work in small hospitals such as those at Roscommon or Ballinasloe. I commend Bill Maher for administering the Galway hospital group which includes Roscommon, Ballinasloe, two Galway hospitals, Sligo, Letterkenny and Castlebar. For example, a heart attack patient or a person seriously injured in a traffic accident will be brought to an accident and emergency department with a throughput of patients. Roscommon, Portiuncula and other hospitals will provide services such as endoscopy and people will come from Dublin and Galway to Roscommon where there is plenty of parking. They will be seen and out in a few hours and they will be well treated. I know of constituents on a waiting list in Sligo for the treatment of varicose veins who had to wait for treatment for nine months. I have suggested to them to try Roscommon hospital which has a waiting list of less then three weeks for the same treatment.

I support the establishment of hospital groups. In the past a consultant would be based in Galway and would visit Roscommon once a week. After six months the consultant would decide that he could not be bothered going to Roscommon and that the poor unfortunates in Roscommon could come to him in Galway. Under the new arrangements, consultants and other medical staff will be required to be in Galway for two days and a day each in Sligo and Roscommon. I commend the arrangement whereby doctors and professional staff can work on a rota between the hospitals in the group.

Health is a very emotive issue. I wish to pay tribute to the nurses and doctors for their work which is often difficult. However, in many cases such as this, the fight is never what the fight is about; it can be a disagreement about overtime or promotions, for example. These issues can impede a solution of the main issue. Much has been achieved with a budget which has been decreased by 20%, with 10% fewer staff and an 8% increase in population. We have to make that money go further.

Fianna Fáil when in government built an accident and emergency department in Roscommon hospital at a cost of €7 million. However, Fianna Fáil when in government also set up HIQA which closed it down. We must ensure the money is well spent and that patient safety is at the forefront. I will hold the Minister to account if patient safety is undermined but I compliment him on his work so far.

This Bill establishes a new financial governance structure for the HSE. It sets a new budget limit and it establishes the first-charge principle so that if the HSE over-runs its budget, that overrun is taken from the following year's budget. It imposes legal obligations on the director general of the HSE to live within his or her financial limits. All these provisions are welcome.

The principal provision is the disestablishment from 1 January 2015 of the Vote of the HSE and the funding of the HSE through the Vote of the Minister for Health. This is a very significant provision and is of some concern. The reaction to this proposed legislation has been very muted in so far as there has been very little reaction from stakeholders and the media has not focused on it to any great extent. This is to be expected because health administration tends to be a very dry subject. People waiting on trolleys and on waiting lists always tend to get the attention of the media rather than the administration of the health service. All of us in this House know that getting health administration right is critical to getting the front-line services right. If there is not a robust administration many things can go wrong. This has been evident over the years with the various configurations of the health service.

This legislation is being introduced under the guise of greater accountability for that €13 billion spend and the decision about who will be responsible for that spend. I have serious concerns about the proposal to concentrate responsibility for expenditure of that scale in the hands of one person, the Minister for Health of the day, whoever he or she may be. This raises significant questions about accountability and the lack of an arm's length approach by the Minister. It is somewhat different in other Departments where much of the expenditure is already spoken for. In the Department of Social Protection the expenditure is decided because the social welfare rates are known and there is no discretionary element. However, the Department of Health has a significant element of discretion as to where the €13 billion should be spent.

When one considers this legislation in combination with the HSE governance Bill, it throws the notion of proper corporate governance out the window. There is no break on the decisions of a Minister if all that power and responsibility is vested in one person's hands. The financial controls in the HSE are far from ideal and I would be the first to accept that there is a need to greatly strengthen those controls. I also acknowledge the fact that some progress has been made in that area in recent times. If full responsibility for that €13 billion expenditure is being taken over by the Minister for Health and the Department of Health, where is the expertise within the Department to manage a budget of that scale? As I am aware there is no health economist in the Department.

It is a very basic consideration where a body is taking over responsibility for a huge budget that we be assured the expertise exists within that body to manage a budget and ensure proper controls. I have concerns in that regard.

Efforts to centralise power and control are happening in the context of what we are told is a move to universal health insurance, UHI. We have had the removal of the board of the Health Service Executive, removal of any independent oversight, and removal of any checks and balances in regard to the budget. All these major decisions are being taken in the context of a promised move to UHI, but we still have not seen the White Paper that was promised in the programme for Government for delivery in the early stages of the Government's term. We are going into the fourth year of this Dáil and we still have not seen it. By all accounts, including the comments made by the Tánaiste this morning, it will be some time before that White Paper is produced. Moreover, there will be a long process to go through after that, assuming the promised White Paper is genuinely a discussion document.

While there are many excellent aspects of our health service, there are also several aspects that are seriously dysfunctional. These dysfunctional aspects must be addressed before we move to a system of universal health insurance. Overall, the health service does not serve patients optimally. There is far too much emphasis on hospital care and very little on preventative medicine, early diagnosis and so on. The greatest concerns in respect of the health service are its two-tier nature and that the cost base is far too high. The programme for Government provides for a significant reduction in the cost base. If that is not achieved before moving to a new system, we are merely imposing the rule of insurance companies on an already problematic and dysfunctional system.

These underlying problems must be dealt with urgently, but the promises we were given in this regard have not been delivered to date. The greatest cost driver across the health service, in primary care and in hospitals, is drugs costs. In spite of many promises to that effect, we have not seen the types of reductions in drugs costs that were envisaged. We still have a situation where Irish consumers - and taxpayers, through the primary care reimbursement service - are paying multiples of what drugs cost in other jurisdictions. Unless that issue is tackled, we will continue to see costs going through the roof.

The same applies in regard to consultants' pay. Again, the programme for Government provided for control of the cost of consultants' remuneration. What the Minister chose to do, however, was cut the pay of new consultants drastically. This is having a knock-on effect in terms of discouraging people from applying for jobs here. Why would young consultants, who have put so much time and effort into their training, be willing to work for 30% less than the people working alongside them? Rather than tackling the problem of high pay among consultants - some 500 of whom are earning in excess of the public sector pay cap of €200,000 - the Minister chose, unfortunately, to penalise new entrants. That is having a very negative impact all around.

Another factor driving costs for consumers is the rising price of private health insurance. Rather than tackling the problem of rising insurance costs, however, measures introduced in the past two budgets have actually made insurance less affordable. In fact, some 6,000 people every month are leaving the private health insurance market.

No serious attempt has been made to control the costs I have referred to within the health service. Equally, there has been no serious attempt to change the model of care. We can only make our health service sustainable if we drastically change the model of care by switching the focus away from the most expensive care, which is acute hospital care, to community and primary care. That is what we were promised, but it has not happened. The narrative seems to be that introducing a limited measure of free GP care amounts to a change in the model of care when, in fact, it is only one tiny element of the change that is required. We know that 70% of the workload in the health service relates to chronic illness. Unless we start providing new models of care which deliver early diagnosis, early treatment and good management of chronic illness, we will not see that switch and make those savings. Not only would we make significant savings by changing the model of care to focus on the primary care sector, we would also achieve much better health outcomes. It is a win-win scenario.

Despite its being set out very clearly in the programme for Government that we must move activity into primary and community care, that nettle is not being grasped. In fact, any move to a new model of care has been greatly impeded by ministerial decisions that were taken in this area. There are clinical care programmes that set out best practice in regard to the management of the major chronic illnesses such as diabetes, asthma, chronic obstructive pulmonary disease and so on - the issues that create the greatest burden of care within the health service. It seems, however, that we are not prepared to put in place the types of programmes that would maximise the prevention of chronic illnesses and also ensure best practice in terms of their management, thereby keeping people out of hospitals.

The introduction of free GP care for children aged six and under is indicative of a one-off type of approach. It does not seem to be part of any type of coherent plan. It is most regrettable that the decision was taken to move away from the programme for Government commitment that the first phase of free GP care would encompass people with long-term illnesses. A great deal of work was done in that area and it would have made absolute sense from everybody's point of view to start with the people who are most ill, namely, those with chronic illnesses. Guaranteeing access for people in that category would have represented a real change in the model of care. Part and parcel of the proposal to bring people with chronic illness into the free GP care initiative was to expand the capacity within primary care, including by way of the provision of increased practice supports for GPs. A great deal of the work of chronic disease management is done by practice nurses and other therapists, as referred to by Deputy Catherine Murphy. These professionals are essential to managing chronic illness at community and primary care level.

All those developments were possible. Money was provided to bring people with chronic illness into a free GP care initiative and expand the capacity of primary care by recruiting additional staff. Ideally, of course, we should be talking about fully staffed primary care teams operating from modern primary care centres. That is not happening because there is some blockage within the Department of Health, some objection to that approach to health care. We know the failure to introduce free GP care in 2012 was nothing to do with finances, because money was provided for it.

We know that €30 million was provided for it last year, but it did not happen. We also know that €20 million was provided in 2012 for the additional therapists who were so badly needed, but the Department of Health decided to redirect that essential funding. Instead of being spent on primary care, it was put towards the deficit that had been allowed to balloon within the Department.

When we consider what is being proposed with regard to universal health insurance, it is important to be conscious of where the funding comes from and where it goes within the health service. We know that Exchequer funding of more than €13 billion is provided each year. It is clear from an examination of the health funding structure over the last decade or so that approximately 80% of that funding comes from the Exchequer. Just 10% of it comes from the insurance companies and a further 10% of it comes from out-of-pocket expenses. The moneys that people pay to GPs, which are included in the out-of-pocket expenses category, account for just 3% of total funding. Moneys paid to consultants are also included in that category. It is clear, therefore, that approximately 80% of all health spending is funded by the Exchequer. The Government, in introducing universal health insurance, is proposing to redirect all of that Exchequer funding through the insurance system. That makes no sense whatsoever, to my mind, because it will have two immediate consequences. If we put a vast amount of Exchequer funding into insurance companies, which will have to cream off their profits, it will become dead money straight away. As a result of its failure to control costs in the health service, the Government is likely to oversee a further escalation of health inflation.

The Government is not learning lessons from what has happened in other countries. As we know, the Minister for Health is fond of referring to what happens in Holland. That may have looked promising when visits were made to that country a number of years ago, but we know now that it has not worked out in Holland. The health service was one of the biggest political hot potatoes during the most recent Dutch general election campaign. The Government in Holland failed to provide for the enhancement of primary care. Primary care is still very underdeveloped in Holland. We also know that costs have gone through the roof in Holland. When the new system was being put in place there, the issue of health inflation was not tackled and the model of care was not changed.

Not only are we proposing to put vast amounts of Exchequer funding - taxpayers' money - into the health service in a way that will allow the insurance companies to cream off their part, but we are also essentially handing responsibility for the health service to private interests. That would constitute the privatisation of our health service, in effect. It would be the wrong way to go. A great deal could have been done if the Government had followed the steps set out in the programme for Government and put in place the building blocks to transform our health service, reduce costs and ensure much better health outcomes are achieved. That plan has been bypassed in many ways. I think it is a big mistake to seek to jump to the end point, which is to have an insurance-based system, without first putting in place the essential building blocks.

As I said during the debate on the Health Service Executive (Governance) Bill, I am firmly of the view that nobody in the Government knows what the future holds for the health service. They are going along with proposals or vague notions of the direction of travel. I challenge anybody on the Government benches to tell me what the health service will look like in five or ten years' time. This is a huge leap into the unknown. It is based on vague notions of what we should be doing. There is no clear evidence base for what is being proposed. I am pleased that the Department of Public Expenditure and Reform now seems to be sitting up and paying attention to what is being proposed. It seems to be aware of the significant dangers that are inherent in going headlong into a whole new regime without thinking it through fully, having a clear plan in place or imposing any controls on expenditure. I hope the Department's voice is heard in terms of where we go.

I welcome the opportunity to speak on the Health Service Executive (Financial Matters) Bill 2013. I commend the Minister and the Government for continuing on the road to reforming the health service by disestablishing the HSE Vote and bringing it back within the Department of Health. The removal of political responsibility for the health service was one of the biggest mistakes to be made in the health sector in recent years. I know from watching Oireachtas committee proceedings before I was elected to this House that Ministers used to shrug their shoulders and say "nothing to do with me, not my fault, not my responsibility". We do not want that sort of health service.

I do not want to get into the universal health insurance debate other than to say that the sort of health service I want in five or ten years' time is one that treats people on the basis of medical need. The debate on how we can get to that point is an important one. I welcome the fact that the Minister intends to publish a White Paper rather than rushing straight in. It is important to get the timing right and to consult. We are all familiar with terrible cases of people turning up for procedures like colonoscopy only to be told they have to wait for a period of time because they do not have private health insurance. We are aware that a person in the same circumstances who has private health insurance might be rushed straight through the following week. We remember what happened in tragic cases like that of Susie Long when people could not access health care on the basis of medical need but were instead denied it on the basis of their ability to pay for it.

This Bill is the latest building block in reforming the health service. I would like to remind the House of some of the recommendations and findings that were contained in a report on the health service that the Committee of Public Accounts published in March 2013 after it had examined the HSE Vote. Finding No. 3 was that "the financial management infrastructure currently available to the HSE comprises of legacy systems from the old health boards and this infrastructure is no longer fit for purpose". Finding No. 4, strikingly, was that "the HSE is not in a position to identify the number of its former staff who are now employed as agency staff and working in the public health system". Finding No. 9 stated:

Sixteen voluntary hospitals receive approximately €1.9 billion in grants from the HSE annually: Only two of the sixteen hospitals are audited by the C&AG: the remaining 14 hospitals are audited privately thus making their boards and executive unaccountable to the Committee of Public Accounts [and therefore to the taxpayer].

Finding No. 11 stated:

The HSE paid out over €2.6 million in allowances to 31 Hospital Consultants who retired in 2011 in lieu of historic rest days that had been accumulated by the consultants during their careers. A payment of over €175,000 each was made to eight of these Consultants.

We know where we have come from. Now it is about how we can get to a better place.

I want to flag two issues that need to be considered and where progress needs to be made. I appreciate that the Minister is cognisant of these issues. The first of the two issues is the provision of funding for people with disabilities. This country constantly hands block grants to service providers. I accept that many of them provide excellent services. We consistently tell people with disabilities to go off and find an available place and to be happy with whatever place they are lucky enough to find. As long as we continue to allow the health service to run like that, we will be unable to have proper oversight of every single cent of taxpayers' money and, much more importantly, people with disabilities will remain disempowered. We would not tell any other group of citizens in this country "take what you are given, there you go, be glad you have a place".

We need to empower people with disabilities. The money follows the client model must be introduced in the disability sector. If that were to happen - if people with disabilities were given control of their destinies - many of the issues that have been examined at the Committee of Public Accounts and many of the concerns of people with disabilities would be removed. I know there is a commitment in this respect in the programme for Government. I know the Minister, Deputy Reilly, and the Minister of State, Deputy Kathleen Lynch, are committed to it. If we are genuine in what we say about getting a proper grip, in terms of financial control, on the Health Vote, we must take this opportunity to do so. At the same time, we would be doing the right thing by empowering and giving an appropriate level of dignity and quality of life to people with disabilities. We should allow them to choose the services they want, rather than handing them a place and taking control out of their hands.

I want to raise the issue of section 38 organisations.

Between section 38 and section 39 organisations we are paying out more than €3 billion in taxpayers' funds each year. We all know the work the HSE is undertaking in trying to bring section 38 organisations into compliance with public sector pay policy, which I welcome. I also welcome the light that has been shone on a sector that has been in darkness for far too long. All is not well, however, in St. Vincent's Healthcare Group and I am not sure people realise the extent of the problems. The HSE is quite correctly trying to bring that organisation into compliance with public sector pay policy. I commend the job it is doing, and the dogged and determined way in which it is pursuing that. However, if the HSE believes public sector pay policy is the only issue that needs to be addressed in St. Vincent's Healthcare Group, it would be sadly mistaken.

One of the largest hospitals in the country, treating so many patients and receiving so much taxpayers' money each year, cannot even file its accounts on time year after year. The Companies Registration Office has had to take the decision to fine it. If any small business in any of our constituencies was not able to file its accounts on time we know it would be fined and would be disapproved of. We also know companies take that responsibility seriously. In this case the best-paid health administrator in the country cannot even file its accounts on time. It is not just one year; we are now into the second year of it. That usually indicates something is not right. It has been allowed to create a bizarre structure that is not in the interests of the public health service. I challenge anybody to explain to me how it could possibly be in the interests of the public health system.

On 15 January I asked the Minister a parliamentary question seeking to ascertain if the Department of Health ever gave permission for public health facilities at St. Vincent's University Hospital to be mortgaged and used as collateral to build a private commercial entity. The Minister checked his records and clarified that there was neither departmental nor ministerial consent to this. This organisation continued to get hundreds of millions of euro of taxpayers' money every year to run a public health service and yet it mortgaged the whole lot of it to banks to go and build a private hospital. It did not believe it needed to check this with the Minister's predecessor or officials at the Department of Health. It just handed over the public hospital and its lands to a bank to build a private commercial venture. I know the HSE and the Department have made efforts to put safeguards in place for the taxpayer, which I welcome. However, that is neither here nor there. There is a level of arrogance in having a health entity that believes it can take our money and do what it wants.

There is no board for the public hospital at St. Vincent's. There is an amalgamated St. Vincent's Healthcare Group board. People seem to remain on the board forever and a day. I am not clear how people are elected to the board. There is one chief executive for the public and the private hospitals, an issue of which the Department is aware. When people go to a board meeting of St. Vincent's Healthcare Group, which is getting hundreds of millions of euro to run two public hospitals, who is protecting the public health interest? Does the CEO have to step into the room and say he is there to look after the commercial venture and then step back out only to come back in again? It is ridiculous; it is like Lanigan's Ball.

It has been allowed to happen even though previous governments knew of it. The former Minister, Ms Harney, presided over it and it has not been fixed. While I accept we should bring the CEO's inordinately high salary into line with public sector pay policy, let us not stop there. The model is rotten and is not working. The model is not protecting the taxpayer and is not accountable. As far as I can make out the model was not authorised by the Department of Health and yet it has been allowed to continue.

It gets worse. There is a crossover of directors. The four directors of the St. Vincent's Foundation, the fundraising arm of the St. Vincent's Healthcare Group are also directors of the St. Vincent's Healthcare Group. Those raising the money are also making the operating and commercial decisions. I am not making a comparison to the CRC in terms of the activities, but we saw what can happen in extreme examples when those safeguards are not in place and crossover of directorships is permitted. It is bad corporate governance, as confirmed to the Committee of Public Accounts by the HSE director general and Mr. Barry O'Brien of the HSE. Yet it is still happening.

We invited representatives of St. Vincent's Healthcare Group to appear before the committee. They plámásed us and told us we were asking very valid questions; they went off and did nothing about it. They should be instructed to fix that today with none of the nonsense that they gave us, claiming it is very hard to find people to serve on boards. It is not good enough and as long as they are receiving our money to run our public health service, they ought to take our concerns with more urgency than they have shown to date.

The next issue with St. Vincent's Healthcare Group is its unique interpretation of the hard-fought for consultant's contract. It confirmed to Susan Mitchell of The Sunday Business Post on 30 January 2011 that 220 patients had been treated by public hospital consultants in St. Vincent's Private Hospital. Under the terms of their new contract, as the Minister knows well, newly-appointed public hospital consultants - referred to as category B contract consultants - are allowed to use 20% of their practice time to treat private patients in public hospitals. They are not allowed to run off to the nearest private hospital and treat their patients there. St. Vincent's Healthcare Group confirmed to the same journalist on January 2011 that it allowed this to happen and that the chief executive had asked consultants to do this in "special circumstances".

I have been contacted anonymously and by people who are willing to put their name to a letter, informing me that this is making it nearly impossible for other hospitals to compete for consultants because it is much more attractive to work in St Vincent's. Obviously, that is not in the interests of our overall health service. However, worse than that, it is depriving our public health service. This is the problem when public and private structures are allowed to merge with one person wearing two hats. The public hospital is being deprived of the income that would derive from treating the private patient in the public hospital.

I have heard of specific cases and I would be happy to provide the Minister with documentation. A patient was taken into the private hospital, told they needed to go over to go to the public hospital for the procedure. They were checked into the private hospital, saw their consultant and were then sent over to the public hospital. They were told that when they got to the public hospital they should say they had no health insurance. The public hospital carried out the operation to install a medical device, which may have cost more than €10,000, and then the patient was wheeled back to the private hospital for the tea and toast. This sort of scenario, where the public hospital is being used as a convenience to carry out the arduous medical work and then the private hospital is then generating income, is not acceptable, but we know it is happening. The HSE knows it is happening and the Minister's predecessor knew it was happening.

We need to get serious about this. The HSE does not often find itself on the right side of issues in the public mind. I commend the proactive stance it has taken on the section 38 organisations and the comprehensive audit it has carried out. In particular I commend Dr. Geraldine Smith, the HSE auditor, who has appeared before the Committee of Public Accounts on many occasions and talked us through the audit report.

I acknowledge the excellent work being done by so many front-line staff in hospitals within the St. Vincent's Healthcare Group and the excellent level of care patients receive. However, I want this House and the Government I proudly support to send a message to the group that sorting out the CEO's pay situation by the end of March is not the only issue. We need to hear from St. Vincent's Healthcare Group on the consultant's contract - it does not have a special arrangement. We need assurances regarding the mortgaging of public hospitals to pay for private facilities. We need it to introduce new corporate governance structures - not just tokenistic ones, but ones that will really protect the taxpayer and the public health service. It also needs to clearly decouple the public from the private.

Enough is enough at this stage. The St. Vincent's Healthcare Group has dragged its feet. It was the last organisation willing to reveal if it was paying top-ups and did so reluctantly just before Christmas Eve. Its representatives then appeared before the Committee of Public Accounts and, as they appeared on the same day as representative of the Central Remedial Clinic, it may have meant they did not get the same degree of media and public scrutiny that was merited.

I have heard from countless people who have serious concerns. I share their concerns and I believe this needs to be rectified.
On a broader level, the HSE and our health services have outsourced a great of deal of funding in recent years to section 38 and section 39 agencies. We need to have a debate on that also. The reason we have been outsourcing funding to disability groups and public and voluntary hospitals is that as a State we have historically failed to provide those services. While problems have arisen on occasion, one would have to worry how much worse services would have been for people with disabilities and for people reliant on health services had such organisations not stepped in and filled that breach. I commend the great work that is done by many section 38 and section 39 agencies but it is not fair that one of the largest and best-funded agency, treating the largest number of patients, would drag its heels on catching up with where the rest of sector is and is willing to go. In the context of financial reform, reforming the health and putting in place the new building blocks, I ask the Minister to take that message very seriously back to his officials and to the HSE.

I recognise that the Minister has the unenviable task that corresponds with the image in mythology or legend of trying to roll the rock up the hill in terms of the HSE, the Department of Health and the delivery of medicine and nursing to the people of Ireland to the people of Ireland. Deputy Harris spoke about St. Vincent's University Hospital. It is not quite the same as all the other hospitals. It was started by the Sisters of Charity in Dún Laoghaire, is that not right, Minister?

Mother Mary Aikenhead.

Yes. That order owned the hospital grounds. I grew up in a house at the top of Nutley Lane, off the main Stillorgan Road, and my mother still lives there and I remember that work on the site of the hospital when it was at the early foundations stage was stopped for a few years because there were no funds or resources available from anywhere to continue the building. It then got off the ground and the structure was built.

Ireland is at a point now where we sometimes try to put a template of appraisal over whole sectors of society such as the delivery of the health service, with modern, demanding standards over established facilities that have evolved little by little over time - physically and financially and all the complications that come with that. The Bill we are debating is the outcome of a health reform agenda set out in the programme for Government, including the commitment to dissolve the HSE and transfer its functions to other bodies as part of a wider move towards the establishment of universal health insurance. Let us think about that.

The objective in that statement is to get to universal health insurance. Deputy Shortall asked whether l universal health insurance will be operated by an overall insurance body or by an amalgam of different insures in a competitive marketplace because then we will be subcontracting to free markets the funding of the delivery of health services. Perhaps it would be better to take the clean state approach and try to estimate for a population of 4.5 million, given the demographic profile of that population, the sorts of illnesses and continuing medical services that might be required now, in the medium and longer term and put measurements on that. That would indicate that a physical amount of delivery of services might be costed in parameter or outline terms. Then we would have an idea of the scale of the budgetary requirements over that time profile.

This is an interim measure towards the goal of universal health insurance. I have a question over what type of overall universal health insurance we will have. Will it be a disparate free market model or a State insurance model like the State pension? In the interim, for best efficiency and effectiveness of the cost consciousness of what we have in place, we need to revisit the accounting systems. The best way to do that, as an interim measure, might be through activities-based accounting rather than the approach of noting what was provided last year, estimating roughly what might be needed next year and putting forward a tranche of money and getting it approved by central funding. That is part of the proposal in this Bill, namely, to move it out of the separation between the HSE, which was some sort of amalgam umbrella of the geographically divided health boards, and the Department of Health. That has become an awkward balancing and contrasting appraisal. The idea now is to get it into one sweep under the Department of Health and to try to standardise, in template-type form, to get uniform measurement over the activities within the various elements of the hospitals and other location set-ups for the delivery of health.

It is a big budget - it is a behemoth. It is €13 billion and 80% of it comes from cental funds and other bits come from insurance funding. As Deputy Shortall pointed out, there will be an attempt to juxtaposition that funding and account must be taken of recognising the requirement by the insurers of a profit margin. To that extent, there will be additional costs to the public. It might be better to revisit this and go back to the first page, the blank page, and say that we will have some form of funding that will be a universal-based one but it will be along the lines of the State pensions provisioning and in the meantime we will get a handle on the activities in the delivery of health services.

The health services comprise not only the delivery to patients of care and the carrying out of operations but the education of the people who will be continuing to service that sector - the education of the nurses, paramedics, medics and specialists. A holistic approach is needed and should be undertaken in a disciplined way, even as interim measures take place, and they should be interim measures and recognised as such.

The overall measurement and presentation of budgetary requirements can be expressed differently than they have been to date. I find that throughout all Departments there is a sequential way of describing things that is presented in a legalistic manner. One has to fight one's way through the sentences instead of reading them in an overall mapping sense. Armies have the huge requirement of logistics.

Historically, the armies at Stalingrad, where there were 800,000 men on both sides on the front line, which is a total of 1.6 million people, had to be logistically provisioned. The way that was done was not by the sort of paragraphing and legally inclined language we see in legislation. Rather, it was very much in terms of maps, bar charts, pie charts, columns, figures and headings. I believe that could also be helpful in appraising the overall medical sector. When one sees things visually in headlines, columns, graphs and proportions, it is easier to understand the scale. One can then support that with drilled down detail. At the moment, it is a sprawling, moving octopus. It does not make sense and is very hard to measure.

The figure of €13 billion is easier to get a handle on because it can be seen as a proportion of the overall budget. As Deputy Shortall pointed out, 80% of that is just over €10 billion, so one is beginning to see things in proportion. That €10 billion is from the Central Fund and the other €3 billion is divided over the health insurers and direct contributions. The Minister knows what I am getting at, so we will not fight over the detail.

Again, when the Minister speaks of 500 consultants, what does this look like in the context of the overall head count? The HSE and the Department of Health may have 135,000 people, so one can see the divisions and where the scale of expense lies.

I am afraid I have to interrupt the Deputy. As it is 4.42 p.m. I ask him to adjourn. He will have nine minutes remaining on the next day.

Debate adjourned.